Prices for basic ingredients such as bread, meat, fish, fruit, vegetables and
sugar have all risen by more than 5pc over the past 12 months as the squeeze
on households shows no signs of letting up.

Although the consumer prices index (CPI) of inflation remained unchanged in May at 4.5pc, the headline rate masked big rises in food prices as transport costs fell sharply due to the timing of the Easter holidays, according to the Office for National Statistics (ONS).

Economists added that once the expected increase in domestic fuel bills takes effect from August, inflation could spike above 5pc.

George Buckley, at Deutsche Bank, said: “If the sizable rise in bills announced so far by one utility company is replicated by the others then inflation could end up topping 5pc over the summer, before falling towards the end of this year or early 2012.”

Prices for electricity gas and water rose by 4pc or more in May after all the major suppliers put prices up over the winter. Scottish Power has said it will increase gas and electricity prices by 19pc and 10pc respectively from August 1.

The data reinforces concerns raised in a paper by the Institute for Fiscal Studies, which found that pensioners and less well-off families are being particularly hard hit by the shape of inflation as they typically spend a greater share of their income on food and fuel.

Better-off families spend more of their income on leisure products, so tend to benefit more from the falling prices for audio visual equipment as well as games and toys. Travel costs fell sharply in May compared with April’s unexpectedly strong jump, when airlines and others ramped up prices in the run-up to Easter and the extra holiday for the Royal Wedding. Over the year, though, they were still 8pc higher.

Bread prices rose 5.8pc, meat 5.1pc, fish 11.4pc, fruit 5.4pc, vegetables 5.1pc, and sugar and confectionary 7.5pc on last year. At the same time, alcohol and tobacco prices rose at their fastest pace since records began in 1997 – at 9.8pc. Restaurants and hotel prices also rose at a record pace of 4.5pc.

Overall, CPI inflation rose by 0.2pc last month, keeping the annual rate at 4.5pc, in line with market forecasts. Inflation has now been more than one percentage point above the Bank of England’s 2pc target for 17 consecutive months, and was last higher than its current rate in September 2008, when inflation hit 5.2pc.

The central bank is concerned that if people expect inflation to remain high, they will put more pressure on employers to raise wages, which will in turn lead to higher prices, known as a wage-price spiral. However, in a quarterly bulletin released on Monday, the Bank reported few signs that inflation expectations have affected price or wage setting behaviour.

Economists said the latest inflation figures suggested the Bank would continue to leave rates at their record low of 0.5pc. “Domestically generated inflation pressures remain benign,” said James Knightley of ING.

Sterling was largely unaffected by the data, which also showed that the retail price inflation (RPI), which includes more housing costs and is the benchmark for many wage deals also held steady at 5.2pc, as expected. Core inflation, which strips out food and energy, also offered encouragement by dropping to 3.3pc from April’s record high of 3.7pc.

Jeremy Cook, chief economist at World First foreign exchange, said: “Core inflation fell to 3.3pc from 3.7pc in April maintaining the stance that the big move higher in prices has been as a result of commodity price moves as opposed to wages.”